For 4 or 5 star parks there are Government Agencies – Fannie Mae or Freddie Mac can provide some of the most desirable loan terms. Notoriously picky: parks must have 50%+ double-wides, curbed streets, not more that 5% park owned homes, etc. and locations near major metro areas. Most parks don’t manage to qualify. Loans are nonrecourse and have yield maintenance prepay penalties but are assumable. Look for rates in the 3%s on 5 year and 4%s on 7 or 10 year fixed, 30 year amortization and 75% LTVs.
A handful of lenders are cautiously active about how and where and to whom they will lend: mostly in larger metro areas, 3+ star parks, limited tolerance to park owned homes, RVs, non-city services, etc. LTVs are 65-75%. Typical rates are 4.00% for 5 year fixed and 4.50% for 7 year fixed on 30 year amortizations. These types of lenders will mostly only do similar parks the Agency Lenders would, but with a bit more flexibility. A couple of national banks break the mold with super low rates and can be the best alternative if they can do the deal.
Regional and Local Portfolio Lenders (local banks- most MHP loans are done this way)
Service a few states or locally within a geographic area and will only lend to either or both properties and/or borrowers in their “footprint”. Loans are held and serviced by the lender. For greater US markets: 70% (usually) up to 75% LTVs, 20 to 25 year amortizations and usually 7 year maximum fixed rate periods at typical rates of 4.75%-5.00%. A few regional lenders offer lower rates of 3.80%, 5 year and 4.25%, 7 year fixed periods and 30 year amortizations. Full personal guarantees required and global income ratios evaluated and overall credit profile (680+ FICO) and net worth equal to or exceeding the loan amount with liquidity of 10% of loan amount and experience in RE investment is needed to qualify.
CMBS Lenders (for everything else)
Conduit loans are expensive – with $35k upfront deposits for 3rd party reports, legal and lender fees. But the fees are the industry standard costs of qualifying the loan for inclusion into the portfolio of mortgages that will be securitized and sold as bonds. What do you get in return? 75% LTV, 10 year fixed rates at about 4.50% currently (3/15/15) on 30 year amortizations. The loans are also nonrecourse. Underwriting is thorough but more liberal than Agency or Regional Lenders for operating structure. Loans can handle large portion of park owned homes (must have adequate lot rent income to support the loan), investor owned and homes sold on contract are not a problem. They can handle unusual ownership structures like co-ops and some condominium hybrids. They can loan most anywhere in the country to 2 star + parks with all single-wides and some RVs. The loans carry “defeasance” prepay penalties. Loan amount minimums are now down to $1.2Mil with our lender.
For a Confidential Review, Call or Email David Harley
(415) 250-5300 ● firstname.lastname@example.org
BluePoint Commercial Mortgage ● 655 Redwood Hwy, Ste. 311, Mill Valley, CA 94941● www.bluepointcm.com